Budget 2013 – Annual Tax Rates and Allowances

A look at some of the key business announcements for 2013's budget

On 20 March the Chancellor announced his Budget for the coming year. The key announcements covered:

A reduction in the corporation tax rate to 20% from April 2015

A £2,000 employment allowance from April 2014

A new capital gains tax relief on the sale of a controlling interest in a business from 2014

Income tax and National Insurance relief on shares for employee shareholders from 1 September 2013

An increase in the new above the line research and development tax credit to 10% from 1 April 2013

The removal of Stamp Duty on shares traded in growth markets such as AIM and ISDX Growth Market from April 2014

NOTE: The figures contained in this article are subject to amendment as the Finance Bills pass through Parliament. This article is a guide only and advice should be taken before acting on its contents.

Income Tax Rates

Rate (%)

2013/2014 (£)

2012/2013 (£)

1012

1-2,790

1-2,710

203

1-32,010

1-34,370

404

32,011-150,000

34,371-150,000

45/505

over 150,000

over 150,000

Savings income (excluding dividends) is taxed at 10% within the savings rate band.

Rate applicable to discretionary and accumulation and maintenance trusts for 2013/14 is 45% (50% for 2012/13) above standard rate band of £1,000; within the standard rate band the tax rate is 10% or 20% depending on nature of income.

1 Only available to extent taxable non-savings income is less than savings rate band2 Savings rate band3 Basic rate band4 Higher rate band5 Additional rate band

Personal Allowances

2013/2014 (£)

2012/2013 (£)

Personal1

Born after 5 April 1948

9,440

n/a

Age under 65

n/a

8,105

Born after 5 April 1938 but before 6 April 1948

10,500

n/a

Age 65-74

n/a

10,500

Born before 6 April 1938

10,660

n/a

Age 75 and over

n/a

10,660

Married couples2345

7,915

7,705

Blind person’s6

2,160

2,100

1Age related personal allowances reduced by £1 for every £2 of income above the limit of £26,100 (£25,400 2012/13) until the basic personal allowance of £9,440 (£8,105 2012/13) is reached. Basic personal allowance reduced by £1 for every £2 of income over £100,000 until completely removed.2 Relief is restricted to 10%.3 Part or the full amount of the allowance may be transferred to the spouse (wife for marriages pre 5 December 2005) or civil partner.4 Available where at least one of the parties was born pre 6 April 1935.5 Married couples’ allowance reduced by £1 for every £2 income in excess of £26,100 (£25,400 2012/13) until minimum allowance of £3,040 (£2,960 2012/2013) is reached.6 Any surplus can be transferred to the spouse or civil partner.

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